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What is the value government efficiency, q? Suppose the following model of government efficiency. Utility function over consumption of private goods (C) and public goods

What is the value government efficiency, q?

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Suppose the following model of government efficiency. Utility function over consumption of private goods (C) and public goods (G) is such that this country desires to have 2 units of consumption good per each unit of public good. Exogenous Income: Y = 20 Lump-sum tax: T Government efficiency: q (This measures the number of public goods that can be produced from one unit of private consumption good) If the optimal lump-sum tax, T*, that maximizes the representative consumer's utility and balance the government budget, is 10, then what is the value government efficiency, q? O A. 0.2 O B. 0.5 O C. 2/3 O D. 1/3 O E. none of the above

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